Private innovation and Operation Warp Speed brought us COVID-19 vaccines in record time along with life-saving treatments like monoclonal antibodies, saving millions of lives throughout the COVID-19 pandemic. Patients and practicing physicians like me are eternally grateful.
Yet the American success story of biopharmaceutical innovation is fragile, in danger of being shattered by the twin threats of a rising China and American progressivism.
Over the past five years, the market capitalization of Chinese biopharmaceutical companies has increased a hundredfold, from $3 billion in 2016 to over $380 billion in 2021, with seven of the world’s 10 largest biopharmaceutical IPOs originating from China. This growth is not accidental: with Xi Jinping’s “Made in China 2025” initiative, pharmaceutical and scientific innovation is a mandate of the Chinese Communist Party (CCP), with the CCP industrial policy previously targeting 2.5% of GDP towards research and development.
By aggressively sourcing foreign intellectual property and human capital, China’s Thousand Talents program has successfully infiltrated the US research community. Openly publishing in scientific journals, the program has even reached the highest ranks in academia. Law enforcement investigations revealed the program had recruited former Harvard University chemistry department chairman Charles Lieber, who in December was convicted on two counts of making false statements to federal authorities, two counts of fabricating and underwriting a false tax return and two counts of failing to file foreign bank and financial account reports with the Internal Revenue Service. Last month, Lieber filed a motion for acquittal or a new trial.
At the same time, progressives have captured the Biden administration, which, amid a multi-year global pandemic, has embarked on a crusade against the pharmaceutical industry. While the administration’s attempt to waive patent rights to vaccines has met with resistance, its other efforts are having fallout that should worry Americans who depend on innovation to help them live healthier lives.
While price fixing is illegal for individuals and businesses, progressives are proposing exactly that for the pharmaceutical industry, with the proposal drug pricing legislationation containing a range of criteria responding to a variety of market challenges with one uniform principle: pricing. We know the dark history of price fixing: it was one of the fundamental principles underlying the economy of the former Soviet Union.
While we owe three cheers to Sen. Joe ManchinJoe ManchinBiden attends in-person DNC fundraiser to tout climate agenda On The Money – War, lockdowns increase inflation risks Bank president sticks with Raskin despite Manchin’s opposition MORE (DW.Va.) for wisely killing Build Back Better, the drug price “negotiation” provision has once again surfaced, with President BidenJoe BidenSaudi Arabia invites Chinese Xi to visit Riyadh: Report Biden attends in-person DNC fundraiser to tout climate agenda Man charged with attempted murder and hate crimes after Asian woman of New York was struck 125 times MORE calling for price controls in his State of the Union address. The pharmaceutical industry has few options to react by calling for price controls, with market entry – or in this case exit – as one of its few strategic responses. Faced with price caps and inflation-linked discounts, new drugs could be launched at higher prices. Ironically, progressive drug pricing policy can increase drug prices.
However, the potential loss of innovation and its impact on patients is of greater concern. While the Congressional Budget Office and Tomas Philipson of the University of Chicago have wildly different estimates of what innovation losses will be, all agree on the direction: price fixing will lead to less pharmaceutical innovation. . Although an abstract concept for many, for those who suffer from devastating diseases such as cancer or diseases for which there are few or no treatments, innovation is a real and current need.
More than 70 years ago, the standard treatment for a heart attack was bed rest. Today, patients undergo heart stenting and take a mix of products to reduce their risk of a later heart attack, giving millions of Americans a new lease on life.
Our biopharmaceutical industry has not even realized its potential. We are on the brink of a biopharmaceutical revolution that will provide Americans with more personalized and effective treatments, with CAR-T cell therapy offering treatment for certain cancers that were otherwise a death sentence and gene therapies in development for some causes of hereditary progressive vision loss. However, instead of tackling regulatory hurdles to value-based contracts for high-cost pharmaceuticals such as the Medicaid drug rebate program, moderate politicians in swing states listened to pollsters who found that Americans were interested in negotiating drug prices, then mistakenly joined the progressive movement. in favor of drug pricing.
They do so at their own risk. Government overreach and inconsistent guidelines during the pandemic have sparked revolts across America. As swing-state Democrats face a tough midterm election and their party platform falters after the dual failures of progressives’ Build Back Better and electoral reform, they would do well to head to environment and follow their instincts. The last thing Americans need in healthcare is another massive wave of government intervention.
Brian Miller, MD, MBA, MPH, is an assistant professor at Johns Hopkins University School of Medicine and previously worked at the Federal Trade Commission, the U.S. Food & Drug Administration, and the Centers for Medicare & Medicaid Services.